Hong Kong to rank third in global IPO race

Hong Kong IPO is expected to perform strongly in the second half of the year.

The stock exchange in Hong Kong is expected to rank third in the global initial public offering (IPO) race amongst other markets in 2021, according to a Deloitte forecast.

Hong Kong will follow Nasdaq and the New York Stock Exchange, which are expected to lead in the first and second place, respectively, by the end of June 2021. The stock exchange in Shanghai will likely follow at the fourth spot.

A total of 46 IPOs are expected to raise some $209.7b in Hong Kong by 30 June. This is a 22% drop compared to the 59 IPOs and a 138% surge in proceeds from $88b raised in the first half of 2020.

For the second half of the year, the Hong Kong IPO is seen benefitting from ample liquidity and positive sentiment for the market. In particular, it will benefit from mega, dual primary, secondary, and spin-off listings of new economy companies.

"Overall, Hong Kong's IPO market achieved a remarkable result in 1H 2021 underscoring its position as an international financial center. This impressive performance includes being able to attract and complete four of 10 largest listings in the world in 1H,” Edward Au, Southern Region managing partner, Deloitte China, said.

“All of these were innovative and technology companies. We look forward to the listings of home-grown technology unicorns in 2H as Hong Kong continues to form and shape an investment and financing ecosystem for new economy businesses gradually."

Deloitte forecast that the Hong Kong IPO market will be raising over $200b in the second half of the year. Its National Public Offering Group projected between 120-130 IPOs raising more than HKD400 billion during 2021.

These listing candidates include technology-based corporate WVR issuers, retail store network, artificial intelligence and innovative solution providers and smart healthcare and pharmaceutical platforms.